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Liberals Challenge Baucus Proposals as Finance's Health Care Markup Continues

By Drew Armstrong, CQ Staff

September 25, 2009 --Senate Finance Chairman Max Baucus will face a number of challenges from left-leaning Democrats when his health care overhaul comes to the floor, but many of those battles are already being fought in committee as his panel marks up the proposal this week.

Liberal senators on the Finance Committee made a number of challenges Thursday to elements of the draft bill. Most of the proposed amendments by committee liberals are in areas where Baucus, a Montana Democrat, has already made compromises with Republicans and moderates—or concessions to health care industry groups—who might otherwise oppose the bill.

West Virginia Democrat John D. Rockefeller IV plans to try to amend a government-run "public plan" into the bill as a replacement for the consumer-owned co-ops Baucus drafted with fellow moderate Democrat Kent Conrad of North Dakota. John Kerry, D-Mass., on Thursday offered a separate amendment that would add a mandate on large companies to provide insurance for their workers—a stricter policy than is in the bill now.

And earlier in the day, Baucus had to join with the committee's Republicans to beat back an amendment by Bill Nelson, D-Fla., that would have undone a deal with the drug industry backed by Baucus and the White House.

With the help of Republicans and a few allies on the committee, Baucus almost certainly has the support to block those efforts. But it won't be the last he hears of them.

"My intention is to have this debate on the floor of the Senate," Kerry said at the markup.

Strategy on the Left Side

Liberals on the panel are ready to take a stand in committee first, and then on the floor, where they think they can win.

"The committee is what starts the debate and gets people thinking," said Charles E. Schumer, D-N.Y. "Lots of people who are not on the committee follow the committee, and that gets people thinking. . . . As the process moves on, for the public option and for some of these other things, it gets better and better."

Rockefeller said that on Friday he intends to offer an amendment that would set up a government-run insurance plan to compete with private insurers. That would essentially mimic policy in the House bill (HR 3200) and in a bill approved by the Senate Health, Education, Labor and Pensions (HELP) Committee (S 1679).

Schumer pointed out that the three committees that marked up the House bill all included the public option, as did the HELP Committee.

"Of all the committees, the public plan faces its steepest obstacle in the Finance Committee," said Schumer, who supports the idea. "It's the most conservative."

Kerry's amendment—a requirement that large employers offer health insurance to their workers—is another policy found in the House and HELP bills that many liberals support, but business groups such as the U.S. Chamber of Commerce strongly oppose it. And while the compromise that Baucus has come up with is not universally popular, his proposal to create a less stringent penalty for companies is favored by moderates and, he hopes, at least a few Republicans, such as Olympia J. Snowe of Maine.

Baucus' proposal would penalize employers whose workers buy health insurance on the new "exchange" marketplace and get tax credits to help them buy it. But the penalties would be limited to $400 for every employee the company has, far below what the average employer spends on employee health insurance premiums.

At the markup Thursday, Kerry argued for his amendment—"I think you've got to require employers to offer insurance," he said—but eventually withdrew it. He said he would continue the debate on the Senate floor, where Baucus may be less able to defend his proposals against more liberal Democrats favoring the mandate in the HELP bill.

Drugmaker Agreement Stays Intact

By a 10–13 vote, the panel rejected an amendment by Nelson that would have made Medicaid responsible for paying for low-income seniors' drugs. Medicare currently handles those payments.

Baucus voted with the panel's 10 Republicans to defeat the amendment, as did Democrats Robert Menendez of New Jersey and Thomas R. Carper of Delaware. The committee's 10 other Democrats voted for Nelson's proposal.

Medicaid generally gets better prices for drugs than Medicare does; Democrats said Nelson's amendment would save $86 billion over 10 years.

But his proposal would have gutted President Obama's deal with Pharmaceutical Research and Manufacturers of America, the industry's trade association. The agreement calls for the industry to contribute no more than $80 billion to the health care overhaul. As part of the deal, PhRMA members have agreed to provide 50 percent discounts to seniors who fall into the so-called "doughnut hole" gap in prescription drug coverage that forces many to pay out-of-pocket for their drugs for part of the year.

Nelson's amendment proposed using part of the money to close the doughnut hole — a move that would cost about $56 billion over 10 years, he said, leaving $30 billion for other purposes.

With a large number of amendments yet to be considered, Baucus said he planned to work late into the night Thursday and to continue the markup on Friday—and perhaps into the weekend.

"Tomorrow," he said, "we'll assess where we are."

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